Airbnb Seems to Have a Problem Actually Guaranteeing Reservations Will Be Honored By Hosts

Among all the controversy over United having Chicago Aviation Police drag a passenger off a plane a week ago, and the horrific videos that spread like wildfire in social media, many commenters here suggested that airline were alone in overselling the products.

Of course some restaurants overbook reservations, too, knowing that a certain percentage of guests won’t show up.

Rental car companies overbook in fact Hertz told me last summer,

Hotels do as well, even people with prepaid reservations can arrive at a hotel property to find the place oversold. One benefit of hotel elite status (some programs, and at certain tiers) is the ability to book a room at a sold out property, although the particulars again vary by chain for instance the benefit may only be allowed when the hotel is already only oversold by a few percentage points.

Fairly standard practice when a hotel is oversold and more guests show up than rooms is:

  • You do not pay for the room night the hotel fails to honor (if you’re prepaid, you get a refund)
  • They cover the night’s lodging at a comparable property nearby
  • If you have elite status with the chain you may be entitled to additional compensation, such as points in the loyalty program equivalent to a free night’s stay (and of course hotels are supposed to avoid walking elite guests)

I’ve been ‘walked’ by a hotel, though never one that was part of a chain where I had elite status. I’ve occasionally had to argue for re-booking assistance and compensation, even up to the standard required by the chain.

In every case though there’s always the chain itself to work with, who can intercede on your behalf at a minimum after the fact to help make you whole. Starwood has always been the best at this, they have had greater clout with their properties and have generally compensated members directly. Other chains like Hilton have had to go to hotels to negotiate with them to see what they’re willing to do (which means they’re usually less generous and fast with service recovery).

Hotels that are franchised rather than managed by a chain may not have much incentive to take good care of a one-off customer, but you’re still the chain’s customer and the hotel uses the chain’s brand. So they do write standards into their contracts and they can fine hotels which don’t honor those standards.

Airbnb on the other hand is a different matter.

  • Like a hotel franchise, the individual renting out a room may be beholden to the Airbnb platform (although Airbnb isn’t the only platform and switching is easier than is reflagging a hotel).

  • The individual renting out a room may see you as a one-off, so while they care about ratings and feedback from guests who stay at their home or property they don’t have a huge incentive to ensure your future business.

One way this manifests itself is that I’ve seen a spike in emails from readers, posts on Facebook, and tweets about Airbnb hosts cancelling bookings even right before a stay — especially during peak travel periods for the destination.

Here’s one complaint fresh off my twitter feed.

Hotels do this too, and Hilton was unable to intercede with one of its properties that cancelled a regular price booking realizing it could charge guests more due to peak demand. But it seems to happen far more often with Airbnb.

When you book an Airbnb property you may be on the hook for a 60 day cancellation policy although 50% forfeiture until one week prior is more common.

On the other hand, the most a host can be charged for cancelling on you even the day before is $100 (although those fees are waived for extenuating circumstances).

And what do you get when this happens to you? Officially nothing but a refund though in practice reports are you also get a discount off your next booking because Airbnb doesn’t want to lose you as a customer.

Oh by the way if you do show up at the Airbnb you’ve rented after the owner cancels on you, you can expect them to call the police too.

Airbnb definitely increases the supply of overall accommodations, although some surveys suggest that so far their success isn’t dragging down hotel bookings. In fact hotel occupancy and rates in the U.S. are up, not down.

  • Airbnb guests may be incremental travelers, or they may be drawn away from staying with family or at a bed and breakfast.

  • Hotels provide services that are materially different than an Airbnb, at least for the short stay business traveler — it’s easy to get the key, there’s routine and sameness, and assistance from the hotel with whatever needs come up.

Unquestionably there’s overlap, and likely more so over time. But if Airbnb wants a foot hold in the traditional hotelier’s market they’re going to need to do a better job actually guaranteeing the reservations they make will be honored.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Most of the searches I do show Comments on the best prospects saying they cancelled the reservation. Why? Is there some reason or incentive why they’d do this and lose the money? How helpful is AirBNB when this happens right before someone’s vacation?

  2. This is a huge problem for AirBnB. I know this happens when there is a big event in a city and hosts can make more on last minute reservations. Compensation isn’t as important to me as re-booking. If you’re in a place that has limited occupancy then you may not even be able to find a place.

  3. I’ve had AirBNB hosts cancel on me thrice. One was a rental property and the landlord didn’t renew the lease, and so the tenants were unable to host me. Once was a very strange couple in New Zealand that got weirder and weirder the closer it was to the stay and finally one of them “got sick” and they canceled the reservation. And once someone’s sibling was in a bad car accident and they needed the space for guests.

    All times AirBNB went out of their way to be helpful. They gave me credit beyond what I’d paid for the stay that I used to stay at nicer places, and once they gave me an additional $100 to use for a future reservation.

    So that’s 3 hosts canceling of about 45 stays. Two of those were legitimate and one was a crazy person, so a pretty good ratio.

  4. AirBNB should require hosts to provide a credit card which is billed for the full cost of alternative lodging when the host cancels within 30 days.

  5. A few years back I rented an expensive home in Miami Beach during a holiday season thru ABB. Turns out- the house didn’t exist. Literally. Someone took a previous listing for the home and posted it on ABB. All the pics. All the details.

    I had a close friend who was a real estate attorney and asked him to check the place out because there were 13 people about to make plane reservations. He was one of them. After looking up the details of the house he spoke to the actual owner who the told him that the house was torn down and in the process of being rebuilt.

    Turns out we weren’t the first victim. A family of 7 pulled up to the property the previous December for Xmas vacation. And the site supervisor gave them the bad news.

    What did we get for our troubles from ABB? 3 weeks of not believing what we told them. Until we told them to send a rep to take pics. Only then did we get our deposit back. No “sorry this happened” No ” can we help you find something comparable” Nothing. It was the first and last time we used them.

  6. I can see that sometimes an AirBNB host will legitimately need to cancel unexpectedly. Life happens, and if you’re sick, or an emergency comes up, there may be no alternative. It’s not like a hotel with a couple of hundred rooms and lots of staff. I hope that it is less common that a reservation is cancelled because they realize they could do better. I made a reservation in Rio for the Olympics at a rate that I could not believe. Didn’t she realize the Olympics will be in town and she could charge a lot more than that for a nice flat in Copacabana? But the reservation was honored exactly as made, though I certainly saw plenty of places on AirBNB with jacked up prices.

  7. I agree. If we (the guests) are responsible for 90%+ of the cost due to a cancellation after booking, hosts should be responsible for that amount as well. They could either find an alternative place that is similar to theirs or they could give the guest that amount in $ so the guest can find their own accommodations.

  8. Not disputing that Air BnB has a problem with hosts canceling, but this entire article comes down to the statement “But it seems to happen far more often with Airbnb.”.

    Any actual, you know, data on this? Otherwise, it’s just speculation.

  9. This is why I highly recommend NOT booking through AirBNB for peak travel times – one is SOL if their reservation gets cancelled at the last second.

    The one thing that really irks me is that there is no stronger requirement for locations with ‘Strict’ cancellation policies. If I have to give up 50% of my booking price to cancel from the moment the reservation is confirmed, why should the host have to only give up $100? For example, I have a $1300 reservation this summer. If the host cancels the day before, they give up 8% of the booking price. If I cancel now, 3 months in advance, I’m giving up 50%, whether the host rents it again or not.

    That has to change.

  10. I had an AirBNB host cancel on me for a place I booked during a trade show. He gave me a couple months notice, but it was irrelevant, since the hotels had been sold out for months anyway. According to AirBNB, they won’t let you re-rent your space during the dates you canceled – although that doesn’t mean you couldn’t rent it privately for much more money. My only choice was to rebook in another AirBNB and pray the same thing doesn’t happen when I get there.

    They’re making a big push into business travel, but they need to impose additional cancelation penalties on hosts that list their places as “business-travel-ready”

  11. This happened to me for a beach rental booked a few weeks ago. Five minutes after I got a confirmation email, o got a cancellation email saying it was booked, sorry. I asked why I was able to book it. The response? “I don’t know.”

    After that terrible interaction, I didn’t want to rent from them anyway. It auto-stamped a review recording the cancellation.

    Come to find out, it was posted on another site and was clearly not available because it had been booked there. I wonder if I had pursued it with AirBnB, what would have happened, or anything?

  12. OMG. Gary. You and some of the other comments here are just clueless. Very often you are booking in someone’s personal HOME. I am a host with over 500 guests and I have never canceled once. Not once. BUT. You are booking in someone’s HOME, not in a freaking Hilton. Life happens! Just imagine how many things could go wrong in your own home. And you don’t have 10 other homes to shift a reservation. Airbnb is actually awesome, if something goes wrong and you call them, they will often give you a free voucher to find another booking if you are stuck. And many more things can go wrong then just a cancellation. If you are not comfortable booking in someone’s home then why the hell are you booking on their website?!? This is not a property with 90 or 300 or 800 rooms. It’s usually just one room. Guess what? Life happens. Using Airbnb is not for everyone. Get real. Don’t like it? Don’t book it. Want the Hilton? Then pay for the Hilton and book the Hilton!!!

  13. Timely, Gary, first time AirBnB users 1 for 2 cancelled with a week to go last week. AirBnB did offer $50 on the new res.

  14. Jim, the point is that some hosts have in their Comments almost nothing but cancellations listed since AirBNB is good enough to disclose this there. So you can find a half dozen good vacation prospects and most of them have serial cancellations. Why should we be forced to gamble if we’re even going to have a place to stay, when the rest of the process can give you a very good idea of what to expect. It’s a serious flaw that needs a better remedy than some cranky old man saying to stop whining.

  15. @Greg awwww. Poor baby. Go BACK to Hilton. My 500+ 5-star reviews won’t miss you. If you are (literally) unable to filter through the reviews and listings, and make an intelligent choice, that is not my problem. I have stayed at dozens of Airbnb’s over the past three years with ZERO cancellations myself. It is not rocket science. My 500+ guests love my listings and they are super happy. And zero cancellations. It takes a slightly discerning sense to figure it out. Maybe you will get there eventually?? Keep trying. Hugs!!

  16. You missed the best part of Matt’s tweet which was Hilton somehow was monitoring the key terms and responded ASAP lol.

  17. @LarryInNYC — oh come on, some things are common sense. More formally (Bayesian) — our prior belief that Airbnb hosts cancel more than hotels is so strong that if the data indicated otherwise, we wouldn’t believe it — there had to have been a clerical error.

  18. @Matt — good idea at the outset, but it would surely cause many hosts to delete their Airbnb accounts out of fear (rational or otherwise) of paying out. Ideally host-initiated cancellations are rare enough that Airbnb itself can eat the cost of reimbursing guests for hotels.

  19. I’ve never lost a hotel reservation in my life. I’ve made five reservations on AirBnB and had hosts cancel them twice, including an Instant Booking. AirBnb was helpful both times, but the hassle is definitely a deterrence.

  20. There really needs to be a better system. I get life happens (as a sometime host, I’ve had to cancel too) but there should be more penalties for the host and Airbnb should do more to re-accommodate people. Their customer service support is always “Well, try to find something else. Here’s some available spots.” No, you find me a place! Moreover, people who are serial cancelers should be banned. I love Airbnb but their customer service is very subpar (as someone who has the work luck with them, I’ve had to deal with them too often), they need to have better penalties for hosts and guarantees for customers in place, and should be more proactive in getting people rebooked.

    Ohh and the cancelation policy should be universal across the board, not up to the host!

  21. AirBNB is not terribly incentivized to penalize hosts – this is a two-sided market but having the most, most varied, and most in-demand properties on their site is how they “win” and is much more important than the incremental guest. That is why the penalties are so lop-sided.

  22. Me thinks Jim A is an employee of AirBNB. I mean really, the hyper inflation “My 500+ 5-star reviews…” and the immediate demeaning nature of every retort. A hothead such as this is not someone who can generate 500+ 5-star reviews…unless he’s had over 100,000 bookings! Come on Jim A, shows us your listing and reviews. I dare ya!

  23. I’ve never rented through AirBnB, but I had been considering it for a couple of nights in a city where there is no Hilton presence. After reading Jim A’s comment here, though, I’m less apt to do so, if his attitude is typical of the attitudes I would encounter from AirBnB hosts.

    Translated – if he is an employee of theirs, as has been suggested, he isn’t doing a particularly good job in selling the service (at least where it comes to this potential customer).

  24. I have had a VR for 11 years. And I have to defend Gary here. I find it despicable how many people have a place booked on AirBnB and it gets canceled at the last minute. I have never done that to my guests, and never would. We’re not even talking about a mistake that is remedied immediately, i.e. you get notified the same day that there was a mix-up and you don’t really have a reservation. In a lot of cases you book months ahead, and get told weeks or days before you arrive that you have no place to stay. And by then all the good places are already booked. Yes, we are not a hotel, it is my second home people are staying in, but in a way it is worse to be canceled on in that situation. When people come to my place they have 8-10 people flying in, and that is just not acceptable that they would have to scramble.

    There are good VR owners and there are ones that don’t manage their calendars, or that cancel bookings just so they can re-book at a higher price. AirBnB should charge owners a lot more than they do for cancelled bookings.

  25. After making a booking 7 months in advance, we had our new year’s reservation for three nights in Amsterdam canceled after we refused to pay 50% more for a number of lame excuses “forgot to charge holiday rate, etc”. Airbnb gave us a whopping $100 towards what ended up being a far inferior place to stay that was $250 more.

    I think Airbnb is pretty desperate for hosts, especially with the new anti-Airbnb laws in Amsterdam and London. The host was penalized $100 and not allowed to relist for those nights, and they temporarily removed the listing but it was back a few weeks later. It was a pretty awful experience and we probably won’t rely on Airbnb again for a booking at a peak time.

  26. I can’t understand why anybody would want the hassle of waiting for a response, and being subject to cancellation risk, unless you’re saving significant money. The way to do ABB is to pickup discounted GCs, only do instant book, whole unit, with good pics and reviews, never any previous cancellations, AND you better be saving at least 20% compared to a similar class hotel. You’re usually giving up many services and amenities, including housekeeping, front desk reception, ability to switch rooms if something’s wrong, etc. Of course, if you’re doing room sharing or higher end condos or houses, comparison to hotels don’t apply.

  27. Airbnb needs to be better at finding a finding alternative accommodations and not charging you extra. They should charge difference to the cancelling host.

  28. This boils down to a level of sophistication when searching and level of comfort to possible cancellation. I’ve looked at ABnB many times but only booked three times. I uncovered 4 fake listings in central London before finding 1 I trusted and it was legit.
    I’ve searched in many other cities but just didn’t reach the level of trust I found with the 3 I’ve actually booked and all were legit.
    That’s the difference between a hotel and ABnB. A hotel gives you a much higher level of confidence that you’ll get a room right off the bat.
    In the end, it’s up to you.

  29. We’ve booked dozens of Airbnb (and similar services) over the years and had one cancellation that was not handled well at all by the host or Airbnb. Booking was for two nights in Amsterdam around New Year’s Eve with our family of five and made 6+ months in advance. Host tried to extort 50% more from us due to them forgetting it was NYE. Airbnb found us a really crappy alternative that was more expensive and they only covered part of the difference.

    Normally Airbnb is quite solid but I would exercise serious caution for advance bookings in popular places around major holidays or events as the terms for the renter cancelling are not in balance with the terms for the host.

    That said, in many locations Airbnb’s primary customer is really the host (it’s difficult to find legitimate hosts in some major cities especially at peak times).

  30. @madguy No reply from Jim. Good call.

    I have used VRBO in the past. Never a cancellation but No matter how good the property is there is always something wrong that disrupts. Broken this, broken that, various other things. You have to make calls, or so without, and then prove you did not break it etc. Just not worth it. Would certainly not fly halfway around the world to be at the mercy of the host’s whims

  31. We’ve been traveling using Airbnb for 5 years and hosting for 3.5 years. We’ve never cancelled a guest reservation and have earned Superhost status (at least 80% 5-star reviews, no cancellations for the past quarter, and responses to all guest queries within 24 hours) every quarter since we started hosting.

    And we’ve never had a booking cancelled when we’ve been Airbnb guests.

    As Airbnb guests, how do we choose our hosts?

    We strongly prefer to book with Superhosts. These are people who are committed to giving a first-rate experience to guests. This is one of the search criteria. We also turn off the default search criterion that shows only Instant Book properties, as we never do that.

    We carefully read the host’s description of the property and scrutinize the photographs. We read the reviews. Then, before we book, we communicate with the host, introducing ourselves and asking questions. That way, we get to know a little about each other and what our experience will be like. As others have noted, Airbnb listings are mostly in residences, and expecting a hotel experience is unrealistic.

    We’ve seen some hosts list on multiple platforms like VRBO and HomeAway as well as Airbnb and get their calendars out of sync, resulting in double bookings. I don’t doubt that some greedy hosts cancel because they underpriced the booking. If they cancel Airbnb bookings, that will automatically show up in the guest reviews and should be a cautionary flag. I don’t know about other platforms’ practices.

  32. Not an AirBNB user, but is there a good reason (other than just their bottom line) to have anything but ‘superhosts’? I think that is the upshot of the whole problem in this thread. What are the other hosts called? By your good standard you have demonstrated, those hosts that cancel, have less than stellar ratings, and who do not respond promptly to guests are called….hosts. That by definition is the base standard of the product being offered; therefore all of the complaints on AirBNB are real for sure, but should be expected, no? Imagine if they (or a new/old competitor) defined the brand to the super host standard?

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